State by State Data

Why “Free Community College” is a Wolf in Sheep’s Clothing

Update: Details of the White House plan are becoming available and make clear it differs significantly from the Tennessee Promise and other “free community college” plans. In particular, the White House proposal is not a “last-dollar” scholarship. Instead, it provides additional federal funding to states that make key reforms, including not charging tuition or fees at community colleges. It is aimed squarely at stopping state disinvestment in public colleges, which is crucial to making college more affordable. Also, unlike the Tennessee Promise, low-income students could benefit. These are clear improvements on the plans discussed in our blog posted earlier today. Still, making tuition free for all students regardless of their income is a missed opportunity to focus resources on the students who need aid the most. Consider California community colleges, with the lowest tuition in the nation and waivers for low-income students. The result? Federal student aid application rates, even among low-income students, have been notoriously low, and part-time enrollment rates sky-high. "Free tuition" is not a panacea.

Many are predictingthat President Obama tomorrow will endorse Tennessee’s "free community college" plan. While the Tennessee Promise is well intentioned and more students than anticipated applied for it, many highereducationexperts have rightly criticized it and other "free community college" plans.

One of the major problems with the Tennessee plan (and others) is that the "promise" isn't actually much of a promise at all. That’s because the "free" moniker only relates to tuition charges – charges which comprise just one-fifth of the actual costs of going to community college. The other costs of college, including textbooks, transportation, and living expenses, are far more substantial – and far more likely to prove a barrier to student success. Yet they’re left out of the deal.

Further, the Tennessee plan (and others like it) is a "last-dollar" scholarship, meaning that it only helps students who don’t get enough from other grants to cover tuition. This is a critically important point because, given the relatively low income of community college students and the relatively low tuition charges at community colleges, it means that the students with the greatest need for financial aid will rarely benefit. Conversely, those with the least need are the most certain to benefit.

Free tuition plans are giant missed opportunities because they put resources where they are less needed when the need is so great in other areas. As shown in the table below, students in the lower income categories need far more financial support to bring college within reach. The vast majority of them (92% for the lowest income group) have "unmet need" even after accounting for available grants and what they can afford out-of-pocket. That’s true of just 9% of students in the highest income category: 91% of those students can already afford not just tuition, but their entire cost of attendance. Surely higher income students would appreciate additional resources, but do they need them? Not according to federal needs analysis, and the vast majority of these higher income students already enroll in college and are the most likely to graduate.

In addition to providing resources where they are not needed or needed less, these free-tuition plans are also ticking time-bombs. They signal that tuition is all that matters and flat-out ignore the other costs of attendance that determine whether students can get to campus, whether they’re focused on the material or how to pay for their next meal while in class, and whether they have a place to sleep at night.

Currently, many community college students get help paying for these other costs in addition to tuition. As shown above, the lowest income students’ average grant aid exceeds the amount of the tuition they’re charged by quite a bit: their total grant aid comes to about three times (328%) their tuition charge. On average, students with incomes below the median get grants that cover full tuition, with some resources left to help pay non-tuition costs, including fees, books, transportation, food and housing; students with incomes above the median get grants that cover, on average, about one-third of tuition.

If we prioritize covering tuition costs, treating the other costs of attendance as less important, how long until the grants for lower income students – grants which currently exceed tuition – are cut? This isn't a fantastical possibility. Limiting certain students’ Pell eligibility to tuition costs was an idea included in a federal appropriations bill not too long ago.

If resources were unlimited, there would be more merit to free tuition arguments. But resources are in fact so limited that the vast majority of low-income students – the students for whom financial aid will make the difference – aren't getting what they need. Free tuition proposals are politically popular, but regressive and inefficient. They are a lot like higher education tax benefits, where there is broad and bipartisan agreement that much better targeting is needed.

Free tuition proposals don’t just fail to move us forward: they’re a step in the wrong direction. We should absolutely do more to encourage students to pursue higher education and make them aware of financial aid, but this is not the way to do it.